‘You can’t get weak in the knees’: Canadian miners continue to expand abroad despite brutal bear market – FINANCIAL NEWS-ecozik.com
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‘You can’t get weak in the knees’: Canadian miners continue to expand abroad despite brutal bear market

Despite a horrendous market in commodities, political risks and serious struggles to raise capital, Canadian firms continue to invest vast sums in mineral assets all over the world.

Canadian miners working abroad just aren’t quitting.

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Our economy is struggling yet Canada’s government bonds were the very best performers this year among major developed economies. What gives?

Despite a horrendous bear market in commodities, ongoing political risks and heavy struggles to raise capital, these firms continue to invest billions of capital in mineral assets all over the world.

Canadian miners spent more than $69 billion on foreign projects in 2014, based on the latest data from Statistics Canada. That’s roughly using the 2013 figures, and is generally more than these were spending per year during the metal price boom last decade. Mining and metal products consistently constitute about 10 % of Canada’s foreign direct investment, based on the Mining Association of Canada (MAC). And along with energy and financial services, it is a sector where Canada is a clear global leader.

“Mining is the area where Canada excels abroad, and that is not going to change,” said Pierre Gratton, president of the MAC.

Obviously, some of the capital being invested today pertains to projects which were greenlighted years ago, once the outlook for commodities was far better. And the 2015 totals, which aren’t yet available, will likely show a decline in overall foreign investment as metal prices weakened significantly over the course of the year. Investment should continue to fall in the future so long as costs are low and capital is scarce.

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